World of Finances

When I discuss Lost Decades I always stress the fact that the “s” denotes the plural. Figure 1 shows that a decade and a half in, the trajectory of output has been noticeably depressed since 2001Q1.

The downtrend post-2001Q1 is more pronounced in per capita terms (extends only to 2011Q3, since I don’t have population post November 2011, and didn’t have the patience to hunt up projections to interpolate to quarterly frequency).

In Lost Decades, we make clear that we can avoid two complete lost decades, if we implemented reasonable policies. But we also recognized the obstacles (p.221):

… Financial interests resist regulations that shift the burden of risky behavior back onto them and off of taxpayers. Beneficiaries of government programs fight against attempts to curb their benefits.

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The face value of outstanding municipal bonds was $3.7 trillion at the end of September, based on figures from Mergent Inc., a private data vendor, compared with the previous figure of $2.9 trillion at the end of June, the Fed said.

The estimate of household holdings of municipal securities and loans is revised up by about $840 billion, on average, from 2004 forward, according to the Feds Flow of Funds Accounts report for the third quarter.

Citigroup Inc., using analysis of bond data, said in June that the central bank was underestimating the size of the local- government market, largely by failing to capture the amount of debt bought by individuals.

The bank estimated that the market was about $3.7 trillion. A Citigroup analyst, Vikram Rai, said the larger ownership by individuals may help explain volatility in tax-free securities amid concern about defaults by state and local governments, a risk that professional investors saw as more limited.

Fund Withdrawals

Investors pulled more than $30 billion from municipal-bond mutual funds from November 2010 to June, according to data from Lipper US Fund Flows.

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If you are a homeowner, you don’t want to spend all your time on looking for tenants, especially if you have a job. Also if you want to move out but can not break a leasing agreement, you need a good tenant. So a decision to find a tenant with tenanthunter.com can save your time and money in different situations.

Of course, there are some fees involved and you can try to find a tenant on your own. Look at the ads of other owners and make a detailed description of your property similar or better.

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Slovakia has only existed as a country since 1993 when it emerged from the break-up of Czechoslovakia (the remainder of the country becoming the Czech Republic). It joined the EU in 2004 with the last raft of new entrants, mainly from the former Iron Curtain countries and it adopted the Euro as recently as 2009.

Slovakia is the second poorest member of the Eurozone (the dubious privilege of being the poorest belongs to Estonia) and has embarked upon its own unpopular austerity measures designed to tackle its own sovereign debt problems.

The world’s spotlight turned onto Slovakia this week as its parliament was set to become the 17 out of 17 Eurozone nations to vote on the enlargement and extension of the remit for the European Financial Stability Fund, (EFSF) the agreement having been endorsed by all other Eurozone partners. The fund is intended to provide support to European financial institutions by offering credit and having the ability to buy government bonds.

The Slovakian coalition government turned the issue of supporting EFSF into a matter of confidence.

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